Date written: 21 May 2020
I have sold all my holdings on CCL and RCL. The primary reason for selling is that I cannot see how the future of cruise ships will look like. And, what’s ironic is that I thought I can see the future of cruise ships in March 2020.
It seems that the Coronavirus may last more than a year. Scientists are talking about 9 to 18 months before vaccines can be developed. If there is no cash inflow for a year, the worse case is bankruptcy and a better case is more debt and dilution on shares.
Even if travel recovers earlier, international travel may be limited. Local travel may dominate in the early recovery stage. This is not a piece of good news for cruise companies since the cruise lines’ routes usually pass through several countries. With international travel is still restricted, it is unknown when cruise lines can sail again (Although CCL claimed they want to sail at August, it is not very likely and definitely not in full capacity).
Maybe I will be better off by investing in Index Fund and bet on America.
Luckily, I still made some good profits in both CCL and RCL. I consider that as a trade but not investment. A gamble! For CCL, I earned 22.5% more than S&P500 in the same period. For RCL, I earned 36.6% more.
And I actually spent quite a lot of time to study and monitor the two companies which I am not sure whether that’s worth it. Now, by getting rid of the two stocks, I feel relieve.